Fresh wage data points to a bigger uprating for 2026, yet a large group of older claimants could still trail younger retirees by thousands a year, while many more brush up against income tax for the first time.
What the 2026 rise could mean for you
The state pension looks set for a 4.8 percent increase from April 2026, guided by the triple lock. That puts the full new state pension on course for about £241.30 a week, or roughly £12,548 a year. The full basic state pension would rise to about £184.90 a week, or £9,614.80 a year.
Projected 2026 rates: new state pension £12,548 a year; basic state pension £9,614.80 a year; gap £2,933.
The Office for National Statistics reported average earnings growth of 4.8 percent in the May–July period, outpacing September inflation of 3.8 percent. Under the triple lock, the highest of earnings growth, September CPI inflation, or 2.5 percent sets April’s uprating. On current figures, earnings growth leads.
How the triple lock sets the increase
- Consumer price index inflation for September of the prior year.
- Average wage growth (three months to July) of the prior year.
- The minimum floor of 2.5 percent.
The government uses whichever is highest. That protects the value of the state pension against prices and wages, but it also creates different outcomes depending on which pension you receive.
Two state pensions, two outcomes
There are two main systems in payment. People who reached state pension age under the new scheme receive a higher flat rate, while those on the older, basic scheme rely on a lower core payment, often topped up by additional state pension entitlements they built up during work.
| Pension type | Projected weekly (2026/27) | Projected annual (2026/27) | Who typically receives it |
|---|---|---|---|
| New state pension | £241.30 | £12,548 | Men and women who reached state pension age on or after 6 April 2016 |
| Basic state pension | £184.90 | £9,614.80 | Men born before 6 April 1951 and women born before 6 April 1953 |
| Annual gap | — | £2,933.20 | Difference between full new and full basic payments |
Who gets the basic rate
Men born before 6 April 1951 and women born before 6 April 1953 fall under the basic system. Many also hold Additional State Pension rights (SERPS/S2P), which can narrow the gap for individuals, but these additions vary widely based on past earnings and contracting-out history.
Who gets the new rate
People who reached state pension age from April 2016 onwards get the new state pension, subject to their National Insurance (NI) record. The full amount normally needs 35 qualifying years, with a minimum of 10 years required to receive anything at all.
Roughly 8.57 million people still receive the basic state pension, compared with about 4.38 million on the new scheme.
Tax risk as the allowance stays frozen
If the personal allowance remains at £12,570 in 2026/27, the projected new state pension of £12,548 sits just £22 below the threshold. That leaves almost no headroom for other taxable income before a tax bill kicks in.
By contrast, basic rate recipients on about £9,614.80 would hold around £2,955 of allowance before tax, though private pensions, earnings and savings interest can still push them over the line.
What this could look like in practice
- A new state pension recipient with £1,000 of private pension income could face basic-rate tax on roughly £978 of it.
- A basic state pension recipient with the same £1,000 private income could remain under the allowance and avoid income tax, depending on other income.
- Tax codes will adjust to collect tax due on the state pension via other income sources, such as a workplace or personal pension.
Frozen thresholds mean more pensioners risk paying tax on small amounts of extra income.
Check your national insurance record
Your NI history shapes your entitlement. Gaps can be costly. You can usually buy voluntary contributions for certain past years to boost your forecast, often at a better rate than markets can provide. People on certain benefits may qualify for NI credits to plug gaps without paying. Claiming Child Benefit in the name of the main carer protects NI credits for state pension, which still catches families out years later.
Practical steps to consider now
- Review your state pension forecast and NI record and identify missing years.
- Check whether you can claim Pension Credit if your income is low; it can also unlock help with housing and council tax.
- Consider Marriage Allowance if one partner has spare personal allowance and the other pays basic-rate tax.
- If you pay tax, check your code and query errors early; wrong codes can lead to overpayments or arrears.
- Use ISAs for savings and investments to keep income outside the income tax net.
- Gift Aid and pension contributions can extend your basic-rate band and reduce tax, subject to your circumstances.
What might change before April 2026
The Chancellor could move tax thresholds or adjust uprating policy at future fiscal events. Any shift in the personal allowance would affect how many pensioners pay tax. The final triple lock figure also relies on the official reading of September 2025 inflation and May–July 2025 earnings growth, so today’s 4.8 percent guide remains a projection, not a guarantee.
Policy debates continue around whether to keep the triple lock in its current form. Some argue it protects living standards after years of price shocks. Others say it stresses public finances and creates sharp year-to-year jumps. For planning, treat the 4.8 percent figure as a working assumption and keep an eye on official announcements.
Bridging the gap if you’re on the basic pension
Older retirees on the basic rate can still improve their position. SERPS or State Second Pension accruals may already lift payments. Voluntary NI contributions might add qualifying years in some cases, though rules differ for those on the pre-2016 scheme. If you rent, have disabilities or care needs, support through Pension Credit, Housing Benefit or disability benefits can raise your total income and reduce bills.
Energy support schemes, social tariffs for broadband and mobile, and council tax support also make a tangible difference. Small savings in regular outgoings can matter more once a pension sits close to the tax threshold, because every extra pound of taxable income can bring a slice of tax with it.
The headline gap is stark, but individual outcomes vary with SERPS top-ups, NI history and other income.
Quick example to test your numbers
Take a retiree on the projected full new state pension (£12,548) plus £2,000 from a personal pension. If the personal allowance stays at £12,570, about £1,978 becomes taxable at 20 percent, creating roughly £395 in income tax. A basic state pensioner on £9,614.80 with the same £2,000 might stay under the threshold if they have no other taxable income, but other sources—such as savings interest—could tip them into tax.
Run a simple calculation for your own mix of incomes. Note the savings allowance and starting rate for savings can reduce tax on interest depending on your earned income, which offers some flexibility in how you hold cash.
Feels fundamentally unfair that pre-2016 retirees can trail by £2,933 even after decades of NI. SERPS/S2P helps some, but it’s patchy and opaque. Why not a targeted top‑up for the oldest cohorts, many of whom have higher health and heating costs? The triple lock protects the headline, yet bakes in two tiers. If the state wants “one nation”, aligne the basic and new rates over time, or at least guarantee a minimum combined level—this is definately needed.
If the new state pension is £12,548 and my savings interest is £400, do I actually pay tax on it? Personal Savings Allowance vs the starting rate for savings is confussing—do they stack, or does one cancel the other?